We cannot regulate stupidity

03.06.2010 (All day)

Sustainability means caring about the next generation. Trust and transparency are the keys for a better world in finance. And what about people who are not rich and don’t talk about ethics? These are some of the topics and questions raised during the first high level panel of the Luxembourg Financial Forum. 600 guests from home and abroad take part at this event organised by Luxembourg for Finance.

Urs Leimbacher, Director of Communication at Swiss Re says that for him sustainability means that companies have to create value by improving. “As Swiss Re we have to bring our house in order, we have co-create incentives for staff and develop solutions for clients.”

Henrik Steffensen, co-founder and VP at Asset4 says that his company started collecting information about sustainability for costumers in 2003, because investors think this kind of data becomes more and more important. “So far, the financial industry has used a lot of excuses not to consider this kind of information systematically. In a world where climate change and pollution are issues to take into consideration, the most forward thinking companies will be the ones that succeed”

For Colvin Melvin, CEO of Hermes Equity Ownership Services, sustainability has to do with financial activity itself and with how financial actors are treating their customers and their assets. “Starting from there, we can define a behavior of responsible investment”.

Guiseppe van der Helm, President of Eurosif, says quite provocatively that “talking about ethics in this room is not very popular”. He adds that even hedge funds start thinking about ethics, not because of their green heart, but because there is money to be made.

Rolf Tarrach, Rector of the University of Luxembourg is convinced that “avoiding crises is a utopia. We have learned a lot about this crisis, but the next one will be different”. Growth by definition is unsustainable. Pushing the idea further, he adds that “the human species has never been known for its long term thinking. “

He compares mankind to animals by saying that “when we get into trouble, we behave like apes”.

In a lively debate, Urs Leimbacher makes the point that “to be sustainable, sustainability must be profitable”. In this order of ideas, employee motivation and cost reduction should be value drivers.

For Henrik Steffensen, trust and transparency are the keys and at the same time the most important factors to do business.

Sustainability is a movement that is ongoing. According to Guiseppe van der Helm, in the Netherlands in the last three years the number of pension funds that have a sustainability policy has risen from 48 to 75 percent.

Rolf Tarrach remarks that it is good to think of the more than 6 billion people living on this earth, “but what about the four billion people who are not rich and who don’t talk about ethics and about carbon emission”, he asks. And they are a vast majority compared to the small part of the rich world who can afford to debate on these noble topics.

The rector of the University of Luxembourg is further persuaded that education plays a very important role. When people get a mortgage, they should understand what it means. “We have to understand this complex world. Unfortunately we cannot regulate stupidity”, he concludes.